IDTechEx Discusses Why AI Should Be at the Top of the National Agenda

Artificial Intelligence has come a long way since the success of DeepMind over Go world champion Lee Sedol in 2016; the world is beginning to change according to the new possibilities afforded by AI. From the robust predictive abilities of OpenAI’s ChatGPT – where the AI chatbot can be used for all sorts of purposes, from creating scripts (including malware) to writing academic essays – to AI image generators that are so good that they can win Sony world photography awards, the complexity and capabilities of AI algorithms are growing at a startlingly fast pace. Hardware is hardly divorced from this. As machine learning workloads become more complex and more compute-hungry, so must hardware scale appropriately to ensure cost-efficiency for end users without stalling progress in the software domain. Hardware and software are tightly linked, and it is the matter .

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2016 may have been the year that the world first took notice of the reality of AI, but IDTechEx believes that 2020 will be the year that is remembered as a turning point in technology initiatives across the globe. Chips for AI training – where training refers to providing AI algorithms with large datasets, such that the algorithm can adjust its weights in order to better fit with the provided data – are typically at the most leading-edge nodes, given how computationally intensive the training stage of implementing an AI algorithm is. Intel, Samsung and TSMC are the only companies that can produce 5 nm node chips. Of these, TSMC is currently the only company that is having any real success with securing orders for 3 nm chips. TSMC is a Taiwanese company, Samsung South Korean. TSMC has a global market share for semiconductor production that is currently hovering at around 60%. For the more advanced nodes, this is closer to 90%. Of TSMC’s six 12-inch fabs and six 8-inch fabs, only two are in China and one is in the USA. The rest are in Taiwan. Therefore, the semiconductor manufacture part of the global supply chain is heavily concentrated in the APAC region, principally Taiwan.

Such a concentration comes with a great deal of risk should this part of the supply chain be threatened in some way. This is precisely what occurred in 2020 when a number of complementing factors (such as the COVID-19 pandemic, the rise of data mining, a Taiwanese drought, fabrication facility fire outbreaks, and neon procurement difficulties due to the Russia–Ukraine war) led to a global chip shortage, where demand for semiconductor chips exceeded supply. Since then, the largest stakeholders (excluding Taiwan) in the semiconductor value chain (the US, the EU, South Korea, Japan, and China) have sought to reduce their exposure to a manufacturing deficit should another set of circumstances arise that results in an even more exacerbated chip shortage.

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The Prize

But this is not the only reason that national and regional government initiatives have been put in place to incentivize semiconductor manufacturing companies to expand operations or build new facilities. The manufacture of advanced semiconductor chips fuels national/regional AI capabilities. These capabilities, in natural language processing (understanding of textual data, not just from a linguistic perspective but also a contextual one), speech recognition (being able to decipher a spoken language and convert it to text in the same language, or convert to another language), recommendation (being able to send personalized adverts/suggestions to consumers based on their interactions with service items), reinforcement learning (being able to make predictions based on observations/exploration, such as is used when training agents to play a game), object detection, and image classification (being able to distinguish objects from an environment, and decide on what that object is), are so significant to the efficacy of certain products (such as autonomous vehicles and industrial robots) and to models of national governance and security, that the development of AI hardware and software should be at the top of the agenda for any government body that wishes to be at the technological forefront.

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